Is Dendreon Done?

By Johanna Bennett

Four years ago, Dendreon (DNDN) was the darling of the biotech sector with a promising cancer vaccine awaiting FDA approval and a stock price sitting above $50 a share.

Today, Dendreon sits just above $2 and CEO John Johnson is out the door after resigning for what the company calls “personal reasons.” Cantor Fitzgerald analyst Maria Goldstein asks if this is “a step down or a step forward” for the financially troubled biotech firm.

She writes:

On the one hand, Johnson’s departure was unexpected. Yet on the other hand, the company is at a critical juncture with modest cash left, a large debt overhang and struggling commercial operations that has yet to fully gain buy-in from the clinical community that it serves. With major layoffs already occurring, and losses of the CFO and the head of commercial operations in the past year, perhaps Johnson’s departure is not so unexpected. Nonetheless, we think the only question really to be answered is whether Mr. Johnson’s exit will force a meaningful change in the sales trend for Provenge.

Since it was approved by the FDA in 2010, Provenge, Dendreon’s cancer vaccine, has failed to live up to once lofty sales expectations.

Johnson arrived in February following the departure of Mitch Gold promising to turn the company around. Provenge sales, however, never accelerated and the company remains crushed under the weight of enormous debt.

We believe the commercial hurdles, competitive landscape and behemoth debt makes this goal virtually insurmountable. Reiterate Sell and we are lowering our price target to $0.50 from $1…It is unfortunate that Dendreon’s struggles continue and we remain skeptical whether new potential leadership can overcome these hurdles in a timely manner.

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There are 4 comments

JUNE 11, 2014 9:41 A.M.

Paul Allee wrote:

I wish that when people wrote articles regarding equities, they would do their research. Dendreon stock never approached $50/share until AFTER they were approved by the FDA, and only held above $50 for about 24 hours. Their average price during that timeframe was in the $35 range.
There are positive catalysts here, and there is ongoing testing of other novel treatments that will eventually be revenue streams. There are MANY BioTechs with nothing approved, and no revenues, with larger debt loads, selling at higher valuations.
To write an article that is comprised only of cut and paste hit pieces by sell-side analysts is irresponsible. To miss-state facts is even more so.

JUNE 11, 2014 12:05 P.M.

Pete wrote:

Paul u are right but when do you get the revenue? Dendron had enough time. when are they going to produce they let the competition breeze past them. The stock did go past $50.00 and it stayed longer than 24hrs.The problem with Dendron is price? poor execution? and bad promotion /advertising. they waited two years to promote there drug.. two years before they ran a commercial or infomercial. While their competition killed them.

JUNE 11, 2014 4:55 P.M.

Hey Pete wrote:

Even though they waited, they still have The most effective treatment on the market and as far as I can tell The Only Immunotherapy Approved by the FDA and the EU with a more favorable label. It is the only treatment available that produces an enhanced immune response that is SUSTAINED as time passes while others fade over time. These of course are just the proven facts.

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